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Bond Market News
US Steel Upgraded to BB+ Following Nippon Steel Acquisition
July 21, 2025
US Steel has been upgraded by two notches to BB+ by S&P after the completion of its $14bn acquisition by Nippon Steel. US Steel is now a 100% Nippon Steel subsidiary, and S&P considers it important to the group’s overseas expansion strategy and makes it unlikely to be sold. The NSA or Golden Share, which provides consent rights to the US government, should not hinder Nippon Steel’s ability to operate US Steel, says S&P. S&P also forecasts EBITDA of $1.5-1.7bn in 2025 and debt-to-EBITDA between 2-3x over the next 12 to 24 months. However, S&P sees a negative free operating cash flow (FOCF) of about $300-400mn in 2026 due to the large spending under the multiyear strategic investment plan as part of the NSA. S&P had downgraded Nippon Steel from BBB+ to BBB a day earlier on the back of the financial burden induced due to the acquisition.
US Steel’s 6.65% 2037s are trading higher by 1 point at 106.25, yielding 5.91%.
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